Don't Ignore This Chart!

Lowes (LOW) Opens The Window To Fresh Highs - Checking Industry Group Strength Tip


Last week, Lowes (LOW) gapped up and touched a fresh high above the 2016 highs. This week it has consolidated in a range but is holding up nicely as the markets wobbled. The 50 Million shares of volume for the week was the highest positive week candle in 3 years. On the price, notice the two year sideways consolidation between $60-$80.

Nice to see the company doing well. It has acquired a Canadian Home Improvement Retailer (Rona) so hopefully that transition will continue to help the stock. Lowes completed the acquisition in May 2016. 

Home Depot broke out to fresh highs three weeks ago, so these two dominant forces in the Home Improvement space could be set up for a nice run here.

For the educational segment, I want to demonstrate a method to find other stocks in a stock industry group so you can find the best in the group, not just the most 'in the news' stocks. If a stock is going to make a big run, we want the industry group to be doing well. This will support our stock choice if everything in the group is running.

We know Lowes looks good, let's check out the rest of the industry group.

First of all, Lowes is in the Cyclicals/ Home Improvement Industry group as we can see in the full quote panel on the very top of the chart above. I have reproduced it here. The SCTR also shows in the quote panel, telling you that Lowes is being ranked in the Large Cap SCTR group rather than the small or Midcap groups.

To get that Full Quote box on your chart, click on the 'full quote' in Chart Attributes under your chart. The box will fill in when it is clicked on, then click 'update'. Notice the first blue check box and the update button in the lower left corner.

Now we know the Sector and Industry group which is Cyclicals/ Home Improvement and we want to find the rest of the stocks, so we need to drill through the sector (Cyclicals), through the industry groups (Home Improvement Retailers), to get a stock list that we want to sort by SCTR ranking. The strongest stocks in the group will be at the top of the list with the highest SCTR score.

To drill down into the industry group, click on Sector Summary either on the Home page or the Free Charts page.

On the Home page, you'll find the Sector Summary link below the Today In The Market Box.

For the Free Charts Tab, you'll find the link on the right hand side.

Clicking on the link, brings you into the Sector Summary expansion. The current table shown is in a sorted order based on the % change intraday today. While XLY is near the bottom of the group, it's SCTR ranking has jumped up to 79.2. That is great news. The entire sector is becoming a top performing sector in the ETF list and outperforming 79% of the ETF's on price action.

Clicking on the Sector, will show you the industry groups page.

I have sorted the column alphabetically by clicking on the column header (Name - in this case) and you can see the sort order symbol I have circled showing you what it the sorting control column. If you click on a different column, you'll move that sort order icon to that column.

Clicking on the 'Home Improvement Retailers' will take you into the industry group. 

Look how nice this is. Almost all the stocks that have an SCTR are better than 60% of the stocks in the market. I particularly like when they move above 75 into the top 25% of the market. With the box showing this strong group, with very few laggards, it looks great!

It only takes three clicks to check a stock compared to its industry group! 

Remember to register for our live webinar tomorrow at 11 EST. We have Arthur Hill, our Member's only columnist working to communicate what he is currently seeing in the market. Both Tom Bowley and I will be on the call as well. It should be a jammed packed look at the markets.

Good trading,
Greg Schnell, CMT, MFTA.

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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